Empire Energy Group (ASX:EEG) has taken a significant step forward in advancing its gas transportation services by entering into an initial agreement with APA Group (ASX:APA), Australia’s leading energy infrastructure business. The agreement aims to establish exclusive midstream gas infrastructure early works and proposed long-form agreements, furthering the memorandum of understanding as announced by Empire on 27th October 2021.

Under the proposed Early Works Agreement, subject to entering long-form agreements and approvals from both parties, APA will invest up to $5 million on Engineering and Design Concepts for midstream gas infrastructure facilities associated with Empire’s Carpentaria Pilot Project. This potential construction of midstream infrastructure will allow the transport of up to 25 terajoules (TJ) per day to the market.

Moreover, subject to entering long-form agreements and approvals by each party, APA has expressed willingness to fund the Carpentaria Pilot Project midstream gas infrastructure facilities under a proposed Partnering Agreement. Such an arrangement would substantially reduce the capital requirements for Empire to commence commercial production.

The proposed Partnering Agreement also entails the transportation of large volumes of gas from the Beetaloo to Australian east coast markets, again subject to long-form agreements and approvals by each party. The leading concept considers the potential construction of a new pipeline connecting the Beetaloo to APA’s existing Carpentaria Gas Pipeline (“CGP”) between Mount Isa and Ballera (Queensland). The concept pipeline connecting the East Coast via the CGP has the capacity to be expanded to meet growing market demand on the East Coast (in excess of 500 TJ/d). Empire and APA will conduct further evaluations on this concept in the medium term.

Managing Director Alex Underwood expressed his enthusiasm for the agreement, stating, “APA, Australia’s leading energy infrastructure business, has demonstrated its desire to connect the Beetaloo Basin to customers both domestic and international, underwriting Australia’s energy security. This agreement is a result of the substantial progress in resource development Empire has achieved since the MOU, announced in October 2021. APA potentially funding the midstream gas infrastructure facilities for Empire’s Carpentaria Pilot Project reduces the capital requirement to Empire, enhancing project economics.”

The establishment of these initial agreements represents a significant milestone for Empire Energy Group, positioning them to move ahead with their Pilot Project and contribute to the development of multi-user, open-access infrastructure for gas export from the Beetaloo Sub-basin to Australian east coast markets. APA Group’s extensive expertise and investments in energy infrastructure are expected to play a pivotal role in driving this venture forward.